The Grand Elop Conspiracy is suddenly looking less crazy

Microsoft Nokia Merger Analysis

As I’ve mentioned before, I’ve long entertained a crazy conspiracy theory about Microsoft sending Stephen Elop to intentionally sabotage Nokia from within and thus make its share prices crash enough so that Microsoft could buy it on the cheap. Under normal circumstances, it would be easy to dismiss such notions as the rantings of an unbalanced madman. But with news today that Microsoft is actually going to buy Nokia’s handset division, I’m starting to reevaluate just how crazy this long-held theory of mine really is.

The Guardian’s Charles Arthur has posted a series of charts showing the decline in Nokia’s handset business since Elop took over in September 2010 and they don’t paint a pretty picture. Here, for example, are the Nokia handset division’s revenues and profits shown before and after the start of Elop’s reign:

nokia-handset-revenues-profits

As you can see, the company’s handset division’s fortunes have been on a consistent downward trajectory ever since Elop announced that the company would switch to Windows Phone. To be fair, this isn’t all on Elop’s shoulders since intense competition from Apple and Samsung would have surely eaten away at Nokia’s handset revenues and profits even if the company hadn’t decided to make such an abrupt shift to a new platform. Even so, recall that Nokia was still the world’s No. 1 smartphone vendor just before Elop took over as CEO and you start to understand just what a dramatic collapse the company’s handset division has undergone.

This collapse has predictably taken a major toll on Nokia’s share price, which consistently traded in the $10 range in the fall of 2010 and which just before Tuesday’s Microsoft merger announcement had consistently been trading in the $4 range.

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To be clear, I don’t actually believe that Elop came in as CEO of Nokia with the intention of wrecking the company and selling it off to Microsoft. But if you wanted to make a compelling case that this was his intention, the three charts posted above — along with outgoing Microsoft CEO Steve Ballmer’s comments that Elop is a candidate to take over his old position — are a good place to start.

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